- Draghi's Rescue Plan Has Created a $103 Billion Problem. S&P Says Sinking Bond Yields Have Worsened Pension Shortfalls. There's a corner of the pension world that needs to brace itself for Mario Draghi. His European Central Bank's 1.1 trillion euro ($1.2 trillion) bond-buying plan might have already blown a 92 billion-euro hole in defined-benefit pension plans by depressing bond yields, Standard & Poor's said Feb. 26. And if the actual start of QE pushes yields further, for longer, companies may have to take drastic measures to make ends meet, and could face a hit to their credit ratings.
- Ruble Recovers on Oil as Morgan Stanley Warns of Risks to Rally. The ruble ended a two-day drop and Russian stocks and bonds advanced as oil’s return above $60 a barrel improved sentiment, while a Morgan Stanley downgrade cast doubt on the rally. The currency appreciated as much as 1 percent to 62 against dollar as Brent crude rebounded from its biggest slide in a month. Bonds advanced, pulling yields from a four-week high, and the dollar-denominated RTS Index extended the world’s largest gain this year. The Finance Ministry plans to sell 15 billion rubles ($241 million) of floating-rate notes Wednesday.
- China’s Debt Binge Spawns Asset-Backed Bond Boom: Credit Markets. Banks are bundling loans into securities to make room on their balance sheets for more lending amid a fading property boom and stuttering economic growth. This isn’t the U.S. circa 2007, it’s China in 2015. Having banned asset-backed bonds in 2009 after they’d helped spark the global financial crisis, authorities in the world’s second-largest economy started allowing sales in 2012. Issuance has climbed since then to 282.3 billion yuan ($45 billion) last year, almost 15 times the offerings in 2013, according to data compiled by Bloomberg. Sales are already up 147 percent this year versus the same period in 2014. The boom is alarming ratings companies as soured loans rise to the highest in four years and China’s public debt soars to more than 250 percent of its gross domestic product, more than double the ratio for the U.S. and Germany. Chinese banks’ profit growth is slowing and the nation’s economy, which expanded at the weakest pace since 1990 last year, is struggling to regain momentum. “There’s been no real economic crisis in China in the past few decades, but if a severe one happens, the performance of the underlying assets backing these securities could deteriorate significantly,” said Jerome Cheng, a structured finance analyst at Moody’s Investors Service in Hong Kong.
- Macau Casino Revenue Has Record 49% Slump on Weak Demand. Macau gaming revenue almost halved in February as a crackdown on corruption in China kept high-stakes gamblers away during the peak Lunar New Year holiday period. Gross gaming revenue in the world’s biggest gambling hub fell 49 percent to 19.5 billion patacas ($2.4 billion) last month, Macau’s Gaming Inspection and Coordination Bureau said. This compares with the median estimate for a 54 percent decline according to eight analysts surveyed by Bloomberg News.
- European Stocks Pare Gains as Bank Shares Decline. European stocks fell the most in more than a month as a decline in lenders and automakers dragged the Stoxx Europe 600 Index lower. Barclays Plc fell 3.2 percent after saying it set aside 750 million pounds ($1.2 billion) to settle a currency-manipulation probe. ING Groep NV and BNP Paribas SA also dropped more than 3 percent. Fiat Chrysler Automobiles NV slipped 3.3 percent after posting slower-than-expected sales in February as frigid winter conditions kept American car buyers home. BMW AG retreated 2.8 percent. The Stoxx 600 lost 0.9 percent to 387.68 at the close of trading, erasing gains of as much as 0.3 percent.
- Global Iron Ore Surplus Seen by World Bank Lasting Two Years. If history is any guide the global glut in iron ore may persist for as long as two years, according to the World Bank, which forecasts that the steel-making raw material will average $75 a metric ton this year. “From experience from earlier iron ore episodes as well as other metal markets, it takes about one to two years for either excess supplies to get back to normal levels or excess demand to be met by larger supplies,” John Baffes, a senior economist at the lender, said in an e-mail response to questions.
- Traders Brace for End of Quiet After VIX’s Biggest Drop: Options. Traders in one of the most popular exchange-traded notes tracking volatility are convinced the calm in U.S. stocks won’t last. Investors added $514 million in February to the iPath S&P 500 VIX Short-Term Futures ETN, known by its ticker symbol VXX, for its biggest monthly inflows since July 2013. The note appreciates as futures on the Chicago Board Options Exchange Volatility Index climb.
- Hillary Clinton's use of private email address while secretary of state draws scrutiny. Former Secretary of State Hillary Clinton used a personal email account to exclusively conduct official business during her time at the State Department, a move that raises questions about access to the full archive of her correspondence, as well as the possibility that she violated federal law requiring official messages to be retained for the record. The existence of the account was discovered by the House select committee investigating the deadly 2012 attacks on the U.S. Consulate in Benghazi, Libya, and was first reported by The New York Times. Clinton did not even have a government email address during her tenure as America's top diplomat, which lasted from 2009 to 2013, and The Times reports that her aides took no action to preserve her emails on department servers, as required by the Federal Records Act. Instead, the paper reports, Clinton's advisers selected which of her emails to turn over to the State Department for archival purposes after going through tens of thousands of pages of correspondence.
- Netanyahu faces Dem ire in wake of Iran address. (video) Israeli Prime Minister Benjamin Netanyahu brought lawmakers of both parties to their feet Tuesday morning during a controversial address to a joint meeting of Congress -- but that didn't stop Democrats still fuming over his visit from continuing their attacks, not only against the invitation but his message, as well.
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- Fed's Yellen reports assets worth between $4.9 mln and $13.3 mln. Yellen held onto shares of ConocoPhillips and Phillips 66 last year despite steep slides in the companies' stock prices triggered by the oil price slump, according to her 2014 financial disclosure statement. Yellen reported total assets estimated at between $4.9 million and $13.3 million, according to the report filed in January with the Office of Government Ethics. The agency released the report on Tuesday.
- conomic conditions are “getting closer and closer to those where it makes sense to really start thinking seriously about starting this process of normalization,” Williams told the FT in an interview.
The newspaper said Williams said the Fed might have to hike borrowing costs "much more dramatically" than otherwise if it waited too long, saying it was better to move sooner and raise rates "gradually, thoughtfully." - See more at: http://www.thefiscaltimes.com/latestnews/2015/02/10/Feds-Williams-says-rate-hike-getting-closer-and-closer-FT#sthash.8HLK2bPs.dpufEconomic conditions are “getting closer and closer to those where it makes sense to really start thinking seriously about starting this process of normalization,” Williams told the FT in an interview.At Least 55 Democrats to Skip Netanyahu's Speech. At least 55 Democrats — eight senators and 47 House members — are vowing to skip the speech, in which Netanyahu is expected to deliver a stinging rebuke of President Obama’s Iran strategy even as the administration is attempting to wrap up delicate talks with Iranian leaders over the future of their nuclear program. Vice President Biden, who is traveling abroad, will be another glaring absence. Late Monday, Sen. Elizabeth Warren (D-Mass.) added her name to the list, according to the Boston Globe.
The newspaper said Williams said the Fed might have to hike borrowing costs "much more dramatically" than otherwise if it waited too long, saying it was better to move sooner and raise rates "gradually, thoughtfully." - See more at: http://www.thefiscaltimes.com/latestnews/2015/02/10/Feds-Williams-says-rate-hike-getting-closer-and-closer-FT#sthash.8HLK2bPs.dpuf
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